The past four months or so have been especially lucrative for ASX investors. The ASX 200 dropped below 6,400 points in September last year. But since then, the Index has risen by more than 15%. That includes the impressive rally of 7.4% that the ASX 200 has enjoyed since the start of 2023.
As such, most ASX-based index funds have risen by a similar amount over the past four months. But one ASX exchange-traded fund (ETF) has almost tripled this gain. It's the VanEck Gold Miners ETF (ASX: GDX).
This ETF isn't too hard to figure out. As its name implies, it invests in a portfolio of gold mining shares sourced from around the world. More than half of its holdings come from Canada. But the United States, Australia, South Africa, China, the United Kingdom, and Peru are also present in this ETF.
Some of the VanEck Gold Miners ETFs' top holdings include Newmont Corp, Barrick Gold Corp, Franco-Nevada Corp, and our own ASX gold shares Newcrest Mining Ltd (ASX: NCM) and Northern Star Resources Ltd (ASX: NST).
Overall, this ETF currently holds 49 individual gold shares within it.
But let's get down to performance.
ASX gold ETF smashes the market's returns
So back in late September 2022, the VanEck Gold Miners ETF hit a new 52-week low of $33.72 per unit.
But today, this ETF is trading at $46.84 per unit at the time of writing. That's a good 38.9% above where it was back in late September. That's close to triple the gains of the broader market:
So why has this ETF been such a winner for investors of late?
Well, again, it's not too obscure. Gold itself has been on a bit of a tear recently. Back in late September last year, the precious metal was asking around US$1,630 per ounce. Today, you'll have to hand over almost US$1,940 for that same ounce of yellow metal.
Gold miners have relatively fixed costs. As such, their profits can increase exponentially when gold rises in price. That's why miners tend to be viewed as a more leveraged way to gain exposure to gold.
To illustrate, the VanEck Gold Miners ETF rose 38.9% over the past four months, but an ASX ETF tracking the price of gold itself – the BetaShares Gold Bullion ETF (ASX: QAU) – is 'only' up by 17.5% over the same period.
So that's why the VanEck Gold Miners ETF has been such a winner for investors of late. However, this ETF is still down by around 23% from the highs of over $60 per unit that we saw back in 2020.
